The organic market has broken through the £2bn mark after recording 7.1 per cent growth last year, with independents beating supermarkets in terms of growth.
Those are the headline figures from the Soil Association’s Organic Market Report 2017, which looks at the market from 2016, and found that while organic recorded the 7.1 per cent rise – up from 4.9 per cent the year before – the non-organic market fell by 0.6 per cent.
The market is now worth some £2.09bn, with around 1.5 per cent of the total UK food and drink market now organic.
The data also revealed huge positives for the independent sector; sales in this sector grew by 6.3 per cent, compared to 6.1 per cent growth in supermarkets. Furthermore, almost 70 per cent of Soil Association Certification independent retailers surveyed had increased sales of organic this year, with just under a quarter staying the same.
Other headline figures include:
• More than 8,000 stores stock organic products, with 6,000 farmers and processors producing and selling into the sector.
• Sales of beauty and wellbeing grew by an impressive 13 per cent, while organic food service was also buoyant, with 19.1 per cent growth, and a 30 per cent rise in organic textiles.
• Sales in the UK are catching up with other markets around the world, now representing around four per cent of worldwide sales.
• Dairy remains the biggest sector, at 29 per cent, and was up 2.2 per cent. Fresh produce takes up 23.5 per cent of the sector and increased by 10.3 per cent.
• Areas that didn’t fare so well included meat, fish and poultry, which fell by one per cent, and bakery and cakes, which was down 5.2 per cent.
• Baby food continues to show solid growth, rising by 5.3 per cent and making up 10.3 per cent of the organic market.
Speaking at the official launch of the report, attended by Health Food Business, Soil Association Chief Executive, Helen Browning, said: “Who would have thought a year ago that we would be coming out of Europe and Donald Trump would be in the White House! In this period of uncertainty, the organic market is still growing and that growth has accelerated over the last 12 months.
“I would like to point out that this growth we are seeing is at a time when we are operating in a difficult political environment. This doesn’t just happen automatically; it happens because we have some phenomenal brands in the UK, who are really entrepreneurial, getting products out in front of consumers and winning new shelf space with retailers who are finally giving more shelf space. Organic is more accessible to people and that’s a big part of the story.”
Drilling down to the detail, Clare McDermott, Business Development Director at the Soil Association, commented: “The 7.1 per cent growth is exceptional. This makes the organic market worth over £2bn and this is where we thought we would get to. The growth has come from all channels and this is a positive picture overall. The consumer is looking for attributes that organic can bring and is increasingly being seen as central to health.”
Looking specifically at the independent growth, McDermott added: “Independents are continuing to grow as they are meeting consumers need for advice, especially through new products and speciality ingredients. Ranges are increasing and wholesalers have seen increased demand by five per cent of organic. Consumers are looking to independents to help with their choices – and they can provide a different and wider range of product options.”
The issue over supply chain, and the fall in organic land, was discussed as one of the main issues to be addressed; the data showed that although applications from organic producers to Soil Association Certification increased in 2016 by 13.5 per cent, the amount of land farmed organically in the UK continues to decline by five per cent. However, land currently being converted to organic has increased by 4.9 per cent.
Looking ahead, the forecast is that 2017 will see further growth of at least five per cent to be worth £2.2bn, and, if growth continues at this pace, will be worth £2.5bn by 2020.
Look out for the April issue of Health Food Business, where the report will be examined in further detail.